Kathmandu, February 6 Amidst the controversies regarding the foreign loan worth $21.3 million obtained by Nepal Satellite Company from Cyprus, which was put on hold in the bank account of the company as per Nepal Rastra Bank’s instruction, the Supreme Court today issued an interim order on it. During the hearing on a petition filed by owner of Nepal Satellite Company Ajeya Raj Sumargi and a staffer of the telecom company, Subash Chandra Paudel, a single bench of Justice Tej Bahadur KC issued an interim order instructing NRB and Nepal Investment Bank not to keep the loan obtained by the company on hold, which means the borrower can withdraw the fund from the bank. Citing the loss accrued by the company, Justice KC ordered the central bank and Nepal Investment Bank to release the fund if the borrower wanted to do so. Nepal Satellite is a telecommunication company being operated under the umbrella of Muktishree Group of Companies owned by Sumargi. Foreign loan mobilised by Muktishree Group

• Air Bell (Cyprus) $80.5 million (transferred on 10 January 2010)

• Air Bell (Cyprus) $3 million (transferred on 10 February 2010)

• Jodhar Investment Pvt Ltd (British Virgin Island) $950,000 (transferred in July 2010)

• Jodhar Investment Pvt Ltd (British Virgin Island) $10.5 million (transferred in 2011)

• Air Bell (Cyprus) $60.5 million (transferred in September 2013)

Source: Nepal Rastra Bank However, in its ruling, the apex court has put a condition that the borrower cannot send back the principal amount and profit generated from this investment abroad until the final hearing and the order of the court will not affect the ongoing investigation on ‘money laundering’. While issuing the interim order, the apex court observed that there was lack of sufficient evidence to back the central bank’s decision to keep the money on hold. The central bank had earlier allowed the same party to mobilise around Rs 8 billion that was obtained as foreign loan without any obstacle between 2006 and 2013. But at the end of 2013, the then governor of NRB Yubraj Khatiwada instructed Nepal Investment Bank to keep the loan amount worth $21.3 million on hold citing suspicious transactions, raising questions on the credibility of the investor and high interest rate on the loan. Sumargi obtained the loan on double-digit interest rate at a time when the interest rate on loans in the international market was below three per cent. The central bank had argued that foreign direct investment brought into the country as a foreign loan would be a long-term burden for the country as the borrower would send back money to the lender in the form of principal and interest and also the profit from the operations. However, the court observed that the central bank stood on weak ground and there was lack of strong legal base to keep the fund on hold. Following the investigation of the Financial Intelligence Unit under the central bank, the Department of Money Laundering Investigation and Central Investigation Bureau of Nepal Police are investigating the case suspecting money laundering. The FIU had earlier stated that the borrower could not validate the source of the foreign loan and suspected that the money had been transferred from shell companies established by the borrower in tax havens. The apex court has called NRB, Nepal Investment Bank and the plaintiff on February 14 for the next hearing.